CORAL GABLES, Florida — Significant trends shaping the hospitality landscape in the Caribbean today are all-inclusive resorts, more brands entering the region and wellness, according to hoteliers.
During the "Views from the Boardroom" panel at the 15th annual Caribbean Hotel Investment Forum, Playa Hotels & Resorts' chairman and CEO Bruce Wardinski said the Caribbean's traditional footprint of primarily independent hotels is changing.
Now there's increased interest from major international brands wanting and taking a piece of the pie, he said. Many of these hotels are also moving up in the price scale and attracting more upscale and luxury travelers.
Wardinski said it's pretty likely these trends are here to stay.
"People are still traveling to the all-inclusives, to the branded resorts and to luxury [resorts]. We're seeing it certainly in our portfolio," he said. "While that demand continues to grow, I think those trends will continue."
Along with these trends, Sandals Resorts International's CEO Gebhard Rainer said segmentation among the chain scales is now much clearer within the all-inclusive model compared to 10 or 15 years ago.
The other trend he sees is the presence of a demographic that has more discretionary income to spend on experiences.
With that, however, comes an expectation of value among these travelers, Rainer added.
"That trend is going to intensify with the next generations. Everything points toward more emotional experiences and more personalized experiences," he said.
Oftentimes the experiences that these travelers want have a wellness element to them.
Carolyne Doyon, president and CEO of Club Med, said by 2025 wellness tourism will reach $1.3 trillion in sales.
It's a trend that's growing quickly and needs to be incorporated across Club Med's resorts, especially in the Caribbean, she said.
The No. 1 trend that stands out to Remington Hospitality's CEO Sloan Dean is how prevalent lifestyle and soft-branded hotels are becoming in the region.
"If you look at our hotels, at least 50% of them are an Autograph, a Tribute, a Curio, a Tapestry, a Voco, something of that nature," he said. "As was said, more of the upscale and luxury experiences [are] going to be much more commonplace as you look at the branded hotels through the Caribbean — a lot of lifestyle, boutique brands."
Much of the resorts that Remington is developing in the Caribbean play up wellness and eco-tourism, he added.
"Wellness is top of mind for these consumers, particularly the younger consumers. They don't just want to come to an all-inclusive and gorge themselves. They want to work out and have different adventures," Dean said.
Rainer said many U.S. consumers are more able to travel globally today than right after the onset of the pandemic, and hoteliers in the Caribbean need to acknowledge that they're competing with that.
"If you don't deliver the value that you're asking consumers to pay for today, which is a lot more than what we did in 2019, they have choices globally," he added.
In terms of finding capital for development of new properties and to renovate existing ones, Wardinski said the debt financing is available.
"We just had been working with one partner recently in the Dominican Republic. Their debt for their project comes from a Dominican bank. [The partner] had quite a few offers from different banks there, so there's definitely debt financing available," he said.
On the equity side, much of it's coming from raising money through pension funds, he said.
"There's a lot of sources of capital that are still interested, and the business is good," Wardinski added.
Club Med is finding success by seeking opportunities with greenfield investment.
About 80% of Remington's development deals in the Caribbean have a branded-residence component, which is making the returns "that much easier to justify."
Debt in the region has not only been easier to obtain than in the U.S., but the spreads and loan-to-cost are also better, Dean added.
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Data Point of the Day
"Roughly 16.3 million stayovers [in the Caribbean] come from the U.S. This is our main source market. Airlift is very central to the success of the Caribbean. In terms of capacity, overall airlift into the region, we have 26.9 million seats available. [That is] up by 6.1% [in 2023] and this is significant. Airlift has been something that has been really challenging for the region. Some destinations have better airlift than others, but it's something as a region that we're working significantly at increasing."
— Nicola Madden-Greig, president of CHTA and director of marketing and sales at Courtleigh Hospitality Group, on the importance of airlift to the Caribbean.
Quote of the Day
"The Caribbean is a little bit challenging, it's a whole different ball game. But working together with that owner and developer and being honest [about] this is what it is, you can move forward."
—Louis Alicea, senior director of development at Wyndham Hotels & Resorts, speaking on a session about renovations and navigating the process of negotiation with franchisees for implementing an adequate property-improvement plan.